Tencent Music Entertainment Group Q1 FY2025 earnings call

• Partnerships: Strengthened ties with record labels like Sony Music, Emperor Entertainment Group, and Rock Records to enrich music libraries and enhance sound quality, including 360 Reality Audio and Dolby Atmos features.
• Content expansion: Deepened content consumption across genres, renewed contracts with South Korean labels, expanded ACG content, and produced proprietary content like 'Time' for Zhou Shen and theme song for 'CrossFire'.
• User engagement: Fulfilled user demand for collectibles with successful album presales and merchandise collaborations, and offered engaging online/offline experiences via events like MUSIC FOR PASSION and AI-driven features.
• ESG progress: Released the 2024 ESG report, detailing practices in IP protection, user privacy, and diverse music communities.

In Q1 2025, Tencent Music Entertainment Group's revenues reached RMB 7.4 billion, showing a 9% year-over-year growth. Online music revenues were RMB 5.8 billion, a 16% year-over-year increase, driven by strong growth in music subscription and advertising revenues. Music subscription revenues in Q1 amounted to RMB 4.2 billion, marking a 17% year-over-year rise, boosted by the expansion of the SVIP membership program. Advertising revenues saw robust growth due to the ad-supported model and sponsorships. Social entertainment services and other revenues declined 12% year-over-year to RMB 1.6 billion, with the company ceasing disclosure of operating metrics for social entertainment business on a quarterly basis as it shifts focus to core music business.

• Anticipates full-year year-over-year growth rate to accelerate in 2025, leveraging strong performance in Q1.
• Sees SVIP membership expansion and advertising growth as key drivers for revenue.
• Plans to continue investing in original content production, high-quality content, and innovative technologies globally to enhance user engagement.

Q: Congrats on the very solid first quarter performance. So can management share a bit more comment around the outlook of our topline profit growth for the next quarter as well as for the full year 2025?

A: Kar Shun Pang stated they expect full-year year-over-year growth rate to accelerate from last year, with SVIP membership expansion and advertising growth driving revenue, and continued investment in content to support long-term growth.

Q: Congrats on the solid results. Question is on how do management think about the growth opportunity of podcasts in China? Can you also share a little bit detail the current -- your long-form audio user metrics and also revenue contribution?

A: Response noted podcast has limited coverage in China but maintains growth, with focus on long-form audio like listening to books, online literature, and children-related content, which complements the SVIP business and enhances content library.